The price of Brent crude on Thursday rose past $50 a barrel for the first time in seven months after the United States announced a fall in its stocks.
The international prices of oil had been plunging from highs of above $100 per barrel two years ago to as low as around $27 in early 2016. Experts blame a series of factors for this but the most important one appears to be a market oversupply.
Nevertheless, there has recently been a boost to the market sentiments over disrupted production in several oil hubs including Canada, Venezuela and Nigeria.
At 0715 GMT in Asia’s trading, Brent, the European standard, was up 34 cents at $50.08 a barrel, while US benchmark West Texas Intermediate was not far behind, trading 28 cents higher at $49.84.
The surge in Asian trade came after the US Department of Energy said Wednesday that US commercial crude oil inventories fell by 4.2 million barrels in the week to May 20, AFP reported.
Traders are eyeing a June 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna where key producers are expected to debate a deal to freeze output to help stabilize the market.
But OPEC member Iran, which only returned to world markets in January after the lifting of the sanctions, has so far refused to freeze its production.
Iran has so far rejected the call to freeze its output as unfair and emphasized that it will go ahead with its plans to increase its oil production.
Iran’s Oil Minister Bijan Zangeneh said in early May that the country is still determined to increase its oil production to pre-sanctions levels of four million barrels per day (bpd), stressing that Tehran will only negotiate over joining the oil freeze plan when that target is achieved.
“We will resort to any move to regain Iran’s lost share in the oil market and increase the country’s production to four million bpd,” Zangeneh has been quoted by the media as saying.
He further described joining the oil freeze plan as a voluntary act of self-sanctioning.
Zangeneh elsewhere said Saudi Arabia is largely to blame for the freefall of oil prices from highs of above $100 per barrel to around $40 per barrel today.
He said oil fell as a result of the persistence of the Saudis to keep their oil production at 10 million bpd as well as by underrating the prices that Iran quotes its clients.
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